Help with pension

Post by **RobertT** » 08 Mar 2019, 18:52

Sputters2017 wrote:You got me thinking now Robert. I have another 8 years before retirement is it worth paying more into my Avc I pay £35 a week . If so how do I increase my payments . Thanks for all your advice it's very much appreciated by everyone

Thanks for the kind words.

It's virtually impossible to say whether paying in more is good for you or not, because I don't know what you've already got in terms of AVC's or main RMPP benefits.

But someone else asked a similar question a few days ago in this thread. So I suggest you work out yourself, based on your own figures, how much in percentage terms your AVC's, DBCBS and standard lump sum(section B) add up to.

If you want to change your AVC's, either the amount you pay or your investment choices, then contact the PSC in Sheffield. Contact details are on the RMPP website.

Sputters2017 · Post by **Sputters2017** » 08 Mar 2019, 19:14

Thanks I will do . Have a good weekend

arnold cheshire · Post by **arnold cheshire** » 10 Mar 2019, 14:50

Can I make a claim for not knowing about AVCs

Post by **RobertT** » 10 Mar 2019, 15:28

arnold cheshire wrote:Can I make a claim for not knowing about AVCs

I assume you're joking. But even if you're not, I have every RM annual pension statement since 1990 and they all mention AVC's in one form or another. And up to 1999 AVC values were actually included on them, rather than having a separate statement from the provider(now Zurich).
Plus they've been mentioned in various versions of the plan guide over the years!

So you've got no chance, I'm afraid.

arnold cheshire · Post by **arnold cheshire** » 10 Mar 2019, 15:36

RobertT wrote:
arnold cheshire wrote:Can I make a claim for not knowing about AVCs
LOL!

I assume you're joking. But even if you're not, I have every RM annual pension statement since 1990 and they all mention AVC's in one form or another. And up to 1999 AVC values were actually included on them, rather than having a separate statement from the provider(now Zurich).
Plus they've been mentioned in various versions of the plan guide over the years!

So you've got no chance, I'm afraid.

Im not joking ive only known about this 6 years or so ago .I still haven't received anything to say I can contribute extra

arnold cheshire · Post by **arnold cheshire** » 10 Mar 2019, 15:40

Post by **RobertT** » 10 Mar 2019, 15:51

arnold cheshire wrote:Im not joking ive only known about this 6 years or so ago .I still haven't received anything to say I can contribute extra

You probably haven't had AVC booklets automatically sent to you, because you have to request them!
But you've had different variations of the plan guide sent to your home address every few years. You've had annual statements. Plus there's the pensions website.
AVC's are mentioned on all of those!

arnold cheshire · Post by **arnold cheshire** » 10 Mar 2019, 15:52

RobertT wrote:
arnold cheshire wrote:Im not joking ive only known about this 6 years or so ago .I still haven't received anything to say I can contribute extra
You probably haven't had AVC booklets automatically sent to you, because you have to request them!
But you've had different variations of the plan guide sent to your home address every few years. You've had annual statements. Plus there's the pensions website.
AVC's are mentioned on all of those!

Ok thanks Robert T

Post by **RobertT** » 10 Mar 2019, 15:56

arnold cheshire wrote:I find it offensive you say LOL

No offence meant!

arnold cheshire · Post by **arnold cheshire** » 10 Mar 2019, 15:56

RobertT wrote:
arnold cheshire wrote:I find it offensive you say LOL
No offence meant!

No problems Robert T

FAB · Post by **FAB** » 10 Mar 2019, 17:08

In my office I would say that a good 90% are blissfully unaware of AVCs and another 5% can't be bothered! Would rather gamble their money away on betting, lottery than risk money on anything risky like pensions! And by the time they do realise it's far too late!

arnold cheshire · Post by **arnold cheshire** » 10 Mar 2019, 17:16

FAB wrote:In my office I would say that a good 90% are blissfully unaware of AVCs and another 5% can't be bothered! Would rather gamble their money away on betting, lottery than risk money on anything risky like pensions! And by the time they do realise it's far too late!

Well said

Post by **RobertT** » 10 Mar 2019, 18:56

FAB wrote:In my office I would say that a good 90% are blissfully unaware of AVCs and another 5% can't be bothered! Would rather gamble their money away on betting, lottery than risk money on anything risky like pensions! And by the time they do realise it's far too late!

Your office sounds a lot like mine, and is probably true of most of the RM workforce.

The sad fact is that many people don't think too much about their pension/retirement until their 50's at the earliest, let alone think about paying in any extra.
In that time they could have missed out on £thousands in free money in additional payments from RM and the taxman, plus investment growth.
But they moan if their CWU subs go up by 10p a week!

There are threads on this forum about paying in the maximum amount into AVC's to stay within the limits for PSE. Which I think is around £120 per week for a full timer.
In practice many posties can't afford to save anywhere near that amount, but small weekly contributions can still make a big difference and mount up to healthy sums, if you start early enough.
Paying into Bonusplan for example, is an absolute no-brainer!

The way I've always looked at my RM pension is that I get a statement every year, and every year it tells me it won't pay out enough to do what I want to do, which in basic terms is to retire early and on a reasonable income.
So I don't think it's rocket science to think that if my main RM pension won't give me that, then it must be up to me to do something about it! And if my employer and the taxman are going to give me a helping hand to achieve that, then I'd be stupid to turn their money down.

posteee · Post by **posteee** » 10 Mar 2019, 21:20

Must admit, that I wouldn't say I was completely unaware of them per se, but my attitude up until the separation from my wife was that extending our house to make it a comfortable family home, and "investing" in holidays for memories etc seemed like the priority. It is only since I found myself up the creek so to speak as a single bloke with another mortgage and a low pension valuation figure, that I really thought at 42.5 years old I needed to take stock and take action. The pension seemed to be so measly on reading the last statement, that one option in my mind was ironically to stop paying into it altogether and think of something else entirely. It was only after phoning the pensions line to ask about my options that I was made aware clearly of the tax and national insurance savings available through salary exchange. I then sat down with a calculator and pen and worked out some sums.
Admittedly, I still feel I am doing too little too late but given the alternative of having almost nothing in retirement it's better than nothing and I will try to increase my AVC payments in time hopefully.
So I think although people may have a vague idea about AVC's I can understand why they aren't exactly the foremost in their minds. I think some people think that retirement is a long way off and they will aim just to work until state pension age (which is still probably something I will have to do if possible). Also, they have a bit of a irrational fear of their pensions being stolen and a pension being a bit of a con.

posteee · Post by **posteee** » 10 Mar 2019, 21:37

Also, I think the sheer amount of money you need in you pot for it to have any real impact, can seem daunting.

Royal Mail employees up until recently haven't really had to think about how much money is in their pension pot because it has been a very generous defined benefit pension scheme. I don't think people realise the commercial value of their pensions. Long standing Royal Mail employees (and other public sector employees) have incredibly valuable pensions which in the "real world", would have cost them hundreds of thousands of pounds in pension contributions. Annuity rates are roughly 5% for people retiring at between 60-65 and so to purchase an annuity pension with £100,000 would only give you a 5% return per year or an income of £5,000 per year, which is peanuts compared to peoples wages. To get a £20,000 p/a pension income from an annuity then, the size of the pension pot would have to be around £400,000 in cash !!! The figures are eye watering and so can see, even if people look at it why they might be turned off. I'm looking at my extra AVC contributions as a bridge really from when I retire to state pension age, if something goes wrong before then.

And Robert T please correct me if you think I've got any of this wrong. It's just from research I have done.